Is China the Biggest Winner of the Middle East War? The Energy Hegemony Landscape Is Changing

[Financial News] As the war between the United States and Iran appears to be moving toward an end, the international community is expected to step up efforts to strengthen energy security. Against that backdrop, China could emerge as the biggest beneficiary. If countries accelerate the expansion of renewable energy and nuclear power to reduce dependence on oil and natural gas from the Middle East, China's influence is likely to grow even further because it effectively controls the related supply chains.
The New York Times reported on the 16th, local time, that "this war is becoming a turning point that is fundamentally reshaping the global energy order, and China is highly likely to be the biggest beneficiary of that change."
The war has clearly exposed the fragility of Middle Eastern energy supply chains. As Iran moved to block the Strait of Hormuz and attacked energy facilities in the Persian Gulf region, the global economy faced supply disruptions and a surge in energy prices. Growth expectations that had held up before the outbreak of war have weakened, and concerns over sluggish growth and high inflation have resurfaced.
The New York Times said the crisis is likely to push countries to make energy security their top policy priority. European and Asian countries are expected to diversify their energy supply routes while also trying to reduce dependence on the Middle East by expanding renewable energy and nuclear power generation.
Dan Walter, a researcher at the British energy think tank Ember, said, "This is a huge turning point," adding, "Technologies that were not competitive five years ago now have a clear price advantage as well."
He explained that the economics of the energy transition have improved compared with the past, as the costs of solar power generation and wind power have fallen sharply and battery technology has advanced.
China is at the center of this shift. China is the world's largest producer of most key items needed for the energy transition, including solar panels, wind turbines, batteries, Transformers and high-voltage transmission cables. It is widely seen as the only country with production capacity, supply chains and price competitiveness all at once. If countries around the world expand renewable energy facilities and electrical grids after the war, Chinese companies are likely to be the biggest winners. Wood Mackenzie, a global energy analytics firm, said that "China will be the clear winner." China will not only gain economic benefits through exports of related equipment, but also build a foundation for expanding its influence in the international community by using energy supply chains as a strategic tool.
Analysts also say the war could work in China's favor in the broader U.S.-China rivalry. U.S. President Donald Trump is focusing on boosting the petroleum and natural gas industries while scaling back support for renewable energy projects. However, if the world moves to expand renewable energy after the war, there are growing concerns that the United States could fall even further behind China in the competition for next-generation energy industries. The New York Times noted that "economic advantages ultimately translate into geopolitical advantages," adding that "as the war deepens tensions between the United States and Europe, China is gaining an opportunity to expand its leading role in the international community."

[email protected] Kim Kyung-min Reporter